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Good morning! Today we look at who's vulnerable in escalating trade fights, President Trump's warning ahead of the EU's White House visit, how some (but not all) manufacturers are shrugging off tariffs, and why China is letting the yuan fall.

RESCUE ME

The Trump administration is extending $12 billion in emergency aid to farmers as U.S. agriculture feels the impact of escalating trade disputes. The U.S. government plans to provide incremental payments to support prices of some of the hardest-hit commodities, including soybeans, sorghum, cotton, corn, wheat and pork, Vivian Salama and Jacob Bunge report. It's a short-term solution for a sector that's taken a series of hits. China, a huge market for U.S. agricultural exports, has applied tariffs on $34 billion worth of U.S. goods, including soybeans and pork. Other places applying retaliatory tariffs include allies such as Canada, Mexico and the EU.

AN APPLE A DAY

Farmers aren’t the only ones vulnerable in a trade fight. The phrase on the back of iPhones—“Designed by Apple in California. Assembled in China”—highlights a key reason for the company’s remarkable success but also shows how exposed it is to the escalating U.S.-China tensions. Apple's most profitable product is a Chinese export—one that could be subject to tariffs. On top of that, China is by far Apple’s most important market outside the U.S., leaving it susceptible if Beijing decides to squeeze its sales, Tripp Mickle and Yoko Kubota report. The U.S. and China combined account for about half of Apple's revenues.

Smartphones haven’t yet been targeted by U.S. tariffs. But President Trump is threatening levies on a total of $500 billion in imports, which would cover just about everything China ships to the U.S., including iPhones.

Do you think the federal government should bail out farmers and companies hurt by new tariffs? Write to Jeffrey Sparshott at realtimeeconomics@wsj.com, tweet to @WSJecon and visit wsj.com/economy for the latest news. (Please include your full name and hometown, or a title and company. Responses may be quoted in this newsletter.)

WHAT TO WATCH TODAY

European Commission President Jean-Claude Juncker visits the White House. Trade is expected to be high on the agenda.

U.S. new-home sales for June, out at 10 a.m. ET, are expected to sink to an annual pace of 669,000 from 689,000 the prior month.

TOP STORIES

JALOPIES AND A JUNCKER

With the threat of tariffs that would hammer the European automobile industry hanging over his head, the European Union's top official Jean-Claude Juncker will meet with President Donald Trump Wednesday at the White House. Mr. Juncker's meeting comes as the White House is considering its largest trade action yet—sweeping tariffs on automobile and auto part imports. It's hard to overstate how critical auto exports are for the EU's economy. The European Union sold $62 billion of autos and auto parts to the U.S. last year. Yes, of that total, $30 billion comes from Germany. But the U.K., Italy, Sweden, Slovakia, Spain, Hungary, Austria, Finland and France all export over $1 billion a year that could be affected too. - Josh Zumbrun

TARIFFS ARE THE GREATEST!

President Trump stepped up his trade rhetoric ahead of Mr. Juncker’s visit. Tuesday morning he tweeted that “Tariffs are the greatest!” Later in the day he said: “I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!” In between he told a VFW convention: “What the European Union is doing to us is incredible. How bad? They made $151 billion last year, our trade deficit with the European Union. They sound nice, but they're rough.”

IT'S NO BIG DEAL

Many U.S. manufacturers are shrugging off concerns over trade tensions as strong demand is yielding stronger-than-expected profits. United Technologies and 3M reported strong sales and said they were less concerned about tariffs than about the rising cost of raw materials, labor and shipping, Doug Cameron reports. Manufacturers are booking more orders and delivering higher profits in a strong U.S. economy. U.S. aerospace and auto manufacturers have also reported strong orders. Sales in Europe and China have been more resilient than many analysts expected. Industrial companies have delivered more forecast-beating sales, profits and margins for the second quarter than any sector except financial services and consumer staples.

HUNG OUT TO DRY

It’s not all good in the industrial sector. Last week the WSJ's Andrew Tangel and Josh Zumbrun reported how the washing machine tariffs (that Whirlpool requested) were ricocheting through the economy, and even Whirlpool wasn't emerging as a winner. Whirlpool's earnings release this week underscored the extent of the damage. The tariffs caused washer prices to soar and the company said demand for its washing machines has been "very soft." The manufacturer trimmed its profit outlook for the year. It stock price dived.

DROP IT LIKE IT'S HOT

China's yuan has lost 6.9% in three months and isn’t far off one-year lows. That hasn't gone unnoticed in Washington: Last week President Trump called out China and Europe for currency manipulation, and said the yuan was “dropping like a rock.” But the fast depreciation reflects bigger economic concerns among Chinese policy makers. Fresh signs of a slowdown are emerging, from softening domestic consumption to rising corporate defaults and weakening investment in highways, factories and the like. That, plus an expected decline in exports as a result of the trade battle, has led Beijing to shift its policy focus toward supporting growth from controlling debt, Lingling Wei and Saumya Vaishampayan.

The upshot: China is letting the yuan slide primarily to combat a softening economy, rather than to hit back at the Trump administration.

QUOTE OF THE DAY

America’s farmers don’t want to be paid to lose—they want to win by feeding the world. This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again. - Sen. Ben Sasse (R., Neb.)

TWEET OF THE DAY

It’s really too bad we don’t have another branch of government that can check the president’s ability to raise tariffs.

Recessions are pretty bad for workers—and not just because of job losses and lower incomes. "This paper uses U.S. and U.K. data to document a more disturbing long-run effect of recessions: young people who leave school during recessions are significantly more likely to lead a life of crime than those entering a buoyant labor market," Brian Bell, Anna Bindler and Stephen Machin write in MIT's Review of Economics and Statistics.

Violent crime against pregnant women results in increased rates of very low birth weight and premature births. "We calculate that these impacts translate into a social cost per assault during pregnancy of $41,771, and a total annual cost of over $4.25 billion when scaled by the national victimization rate," Janet Currie, Michael Mueller-Smith and Maya Rossin-Slater write in a National Bureau of Economic Research working paper. The results also suggest that such violent crime "is an important new channel for intergenerational transmission of inequality."

UP NEXT: THURSDAY

The European Central Bank releases a policy statement at 7:45 a.m. ET and central bank President Mario Draghi holds a press conference at 8:30 a.m. ET. The ECB is expected to signal its intention to keep its key interest rate below zero for at least another year.

U.S. durable goods orders for June, out at 8:30 a.m. ET, are expected to rise 3% from the prior month.

U.S. jobless claims are expected to tick up to 215,000.

U.S. Trade Representative Robert Lighthizer appears before the Senate Appropriations Committee at 9:45 a.m. ET.

President Trump travels to Granite City, Ill., where he is scheduled to give remarks on trade at U.S. Steel Granite City Works at 3:05 p.m. ET. U.S. Steel restarted some operations at the site as Mr. Trump imposed tariffs on steel and aluminum.